how-does-income-elasticity-of-demand-help-categorize-goods-into-necessities-luxu

Question

How does income elasticity of demand help categorize goods into necessities, luxuries, and inferior goods?

Accepted Answer

By indicating how quantity demanded changes with income changes.

Answer

By assessing the impact of advertising on demand.

Answer

By showing the price sensitivity of consumers.

Answer

By measuring the supply response to income changes.